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CIRCULAR No

CIRCULAR No. 12/2001/TT-BLDTBXH-TT OF DECEMBER 19, 2001 GUIDING THE RETIREMENT AGE OF PIT COAL MINERS

In furtherance of the Government�s Decree No.61/2001/ND-CP of September 7, 2001 prescribing the retirement age of pit coal miners, after consulting with Vietnam Labor Confederation and a number of concerned agencies, the Ministry of Labor, War Invalids and Social Affairs hereby guides the implementation thereof as follows:

I. APPLICATION SCOPE AND OBJECTS

1. This Circular shall apply to enterprises engaged in pit coal mining, including:

- State enterprises subject to the Law on State Enterprises;

- Foreign-invested enterprises subject to the Law on Foreign Investment in Vietnam;

- Enterprises subject to the Law on Enterprises.

2. Application objects include laborers, who are regularly engaged in pit coal mining occupations or jobs, more concretely as follows:

- Exploitation of coal in pits;

- Transportation of coal, earth and rock in pits;

- Operation of drilling machines in pits;

- Blasting in pits;

- Digging of pits for coal exploitation.

II. RETIREMENT CONDITIONS AND ENTITLEMENT REGIME

1. Conditions:

The objects defined in Section I above, if fully meeting the following conditions, shall be entitled to retirement regime:

a/ Being aged full 50 years;

b/ Having paid social insurance premiums for full 20 years or more, of which at least 15 years for working as pit coal miners and paying social insurance premiums according to wage levels provided for such occupation (non-sequential payments shall be aggregated).

2. Retirement entitlement regime:

a/ Pension levels:

Article 2 of Decree No.61/2001/ND-CP prescribes: Monthly pension levels applicable to laborers who were once engaged in pit coal mining shall be calculated according to the general provisions of the Government�s Decrees No.12/CP of January 26, 1995 and No.93/1998/ND-CP of November 12, 1998, concretely as follows: For those who have paid social insurance premiums for full 15 years, pension shall be equal to 45% of the average monthly wage which serves as basis for social insurance premium payment in five consecutive years with the highest wage level. For each additional year of social insurance premium payment, 2% shall be added to the said percentage, but the maximum pension level must not exceed 75% of the average monthly wage which serves as basis for payment of social insurance premiums in five consecutive years with the highest wage level.

a.1/ The calculation of pensions shall be made as follows:

Those who have paid social insurance premiums for full 15 years shall enjoy a pension equal to 45% of the average monthly wage which serves as basis for social insurance premium payment. For each year (12 months) more, 2% shall be added to that percentage, which, however, must not exceed 75% of the average monthly wage which serves as basis for social insurance premium payment. In addition to monthly pension, retired laborers, who have paid social insurance premiums for more than 30 years, shall also enjoy a lump-sum allowance, which is calculated as follows:

For each year (12 months) of paying social insurance premium from the 31st year onward, the pensioners shall be entitled to half of the average monthly wage which serves as basis for social insurance premium payment, but such a lump-sum allowance must not exceed 5 months� wage.

Example 1: Mr. Hoang Dinh Q reached the age of 50 in January 2001, and had paid the social insurance premium for 28 years, of which 15 years for working as a pit coal miner. Mr. Q�s pension level shall be calculated as follows:

For the first 15 years: The pension shall be equal to 45% of his average monthly wage which serves as basis for social insurance premium payment

For the period from the 16th year to the 28th year:

13 years x 2%/year = 26%

Total: 45% + 26% = 71%

So, Mr. Q�s pension shall be equal to 71% of his average monthly wage which serves as basis for social insurance premium payment.

Example 2: Mr. Le Huu X reached the age of 50 in January 2001, and had paid the social insurance premium for 32 years, of which 15 years of working as a pit coal miner. Mr. X�s pension level shall be calculated as follows:

For the first 15 years: The pension shall be equal to 45% of his average monthly wage which serves as basis for social insurance premium payment

For the period from the 16th year to the 30th year:

15 years x 2%/year = 30%

Total: 45% + 30% = 75%

For 2-year period from the 31st year to the end of 32nd year, Mr. X shall be entitled to a lump-sum allowance equal to the monthly wage which serves as basis for social insurance premium payment.

In this case, Mr. X�s monthly pension level shall be equal to 75% of his average monthly wage which serves as basis for social insurance premium payment.

a.2/ The average level of monthly wage, which serves as basis for social insurance premium payment in 5 consecutive years with the highest wage level, shall be calculated according to the following formula:

Total amount of wage which serves as basis for social

Average level of insurance premium payment for consecutive

monthly wage which 60 months(5 years) with the highest wage level

serves as basis for = ------------------------------------------------------------------

the social insurance 60 months

premium payment

Example 3: Mr. Tran Van D reached the age of 50 in January 2001, and had paid the social insurance premium for 26 years and 10 months, of which 17 years for working as a pit coal miner. During his working period, he paid social insurance premiums according to the following wage levels:

- From March 1975 to December 1999, he continuously worked as a pit coal miner and enjoyed different wage levels during the following periods:

+ From March 1975 to the end of June 1979, he enjoyed grade-1 wage of 50 dong, which was converted into 352 dong under Decree No.235/HDBT of September 18, 1985; and converted under Decree No.26/CP of May 23, 1993 with a coefficient of 1.62 (new grade 1);

+ From July 1979 to the end of June 1984, he enjoyed grade-2 wage of 59.6 dong, which was converted into 375 dong under Decree No.235/HDBT; and converted under Decree No.26/CP with a coefficient of 1.92 (new grade 2);

+ From July 1984, he enjoyed grade-3 wage of 70.9 dong, which was converted into 399 dong in September 1985 under Decree No.235/HDBT and enjoyed until June 1988; and converted under Decree No.26/CP with a coefficient of 2.28 (new grade 3);

+ From July 1988 to the end of May 1993, he enjoyed grade-4 wage of 432 dong, which was converted under Decree No.26/CP of May 23, 1993 with a coefficient of 3.01 (new grade 4);

+ From July 6, 1993 to the end of June 1996, he enjoyed grade-5 wage with a coefficient of 3.58;

+ From July 1996 to the end of December 1999, he enjoyed grade-6 wage with a coefficient of 4.24.

- From January 2000 to the end of December 2001, he was transferred to work as a pit railway repairer and enjoyed a wage coefficient of 3.45 (grade 7, group II, wage scale A6 for capital construction domain).

The average monthly wage to serve as basis for social insurance premium payment in five consecutive years with the highest wage level shall be calculated from January 1995 to the end of December 1999, more concretely:

- From January 1995 to the end of June 1996:

18 months x (3.58 x 210,000 dong) = 13,532,400 dong.

- From July 1996 to the end of December 1999:

42 months x (4.24 x 210,000 dong) = 37,396,800 dong.

Average level of

monthly wage which 13,532,400 dong + 37,396,800 dong

serves as basis = ----------------------------------------------- = 848,820 dong

for social insurance 60 months

premium payment

Example 4: Mr. Phan Van N had a working period of 24 years, of which 16 years for working as a pit coal miner, will fully meet the retirement conditions in April 2002, and was transferred to different jobs through periods with the following different wage levels:

- From April 1978 to the end of December 1981, he worked as a pit coal miner with grade-1 wage of 50 dong, which was converted into 352 dong under Decree No.235/HDBT, and converted under Decree No.26/CP with a coefficient of 1.62 (new grade 1);

- From January 1982 to the end of August 1985, he worked as a pit coal miner with grade-2 wage of 59.6 dong, which was converted into 375 dong under Decree No.235/HDBT, and converted under Decree No.26/CP with a coefficient of 1.92 (new grade 2);

- From September 1985 to the end of December 1989, he worked as a pit coal miner with grade-3 wage of 399 dong, which was converted under Decree No.26/CP with a coefficient of 2.28 (new grade 3);

- From January 1990 to the end of December 1992, he worked as a pit coal miner with grade-4 wage of 432 dong, which was converted under Decree No.26/CP with a coefficient of 3.01 (new grade 4);

- From January 1993 to the end of December 1995, he worked as a pit coal miner with grade-5 wage of 462, which was converted under Decree No.26/CP with a coefficient of 3.58 (new grade 5);

- From January 1996 to the end of December 1999, he was transferred to work as a security personnel and enjoyed a wage coefficient of 2.92 (grade 5, wage frame B.16, wage table for workers and employees directly engaged in production, business or service).

- From January 2000 to the end of March 2002, he returned to work as a pit coal miner with a wage coefficient of 3.58 (grade 5).

So, though Mr. N enjoyed the highest wage coefficient of 3.58 in two periods (from January 1993 to December 1995 and from January 2000 to March 2002), but he shall not have the wage levels of these two periods aggregated for calculating the average wage level because these two periods are not consecutive. In this case, the average monthly wage level to serve as basis for social insurance premium payment in 5 consecutive years with the highest wage level shall be calculated for the period from January 1991 to the end of December 1995:

- From January 1991 to the end of December 1992, the wage shall be calculated according to coefficient of 3.01;

- From January 1993 to the end of December 1995, the wage shall be calculated according to coefficient of 3.58.

Concretely as follows:

- From January 1991 to the end of December 1992:

24 months x (3.01 x 210,000 dong) = 15,170,400 dong.

- From January 1993 to the end of December 1995:

36 months x (3.58 x 210,000 dong) = 27,064,800 dong.

Average level of

monthly wage which 15,170,400 dong + 27,064,800 dong

serves as basis for = ----------------------------------------- = 703,920 dong social insurance 60 months

premium payment

(Wages mentioned in the above examples are calculated on the basis of the current minimum wage level prescribed in the Government�s Decree No.77/2000/ND-CP of December 15, 2000).

b/ Other social insurance regimes, such as: sickness, pregnancy and maternity, labor accident and occupational disease, death and funeral shall comply with the Government�s Decree No.12/CP of January 26, 1995 and the guidance in Circular No.06/LDTBXH-TT of April 4, 1995 of the Ministry of Labor, War Invalids and Social Affairs.

3. In cases where a laborer is already aged full 50 years, lacks 5 years of social insurance premium payment and still has a good health, he/she may continue working until he/she fully meets the retirement conditions, but not beyond the age of 55, concretely as follows:

a/ A laborer, who had full 15 years or more working as a pit coal miner, but had paid the social insurance premium for less than 20 years, and still has a good health, may continue working and pay social insurance premium until the full 20 years of social insurance premium payment.

Example 5: By January 1, 2002, Mr. Nguyen Van A will reach full 50 years of age and has paid social insurance premium for 17 years, of which 15 years for working as a pit coal miner. If he still has a good health, he may continue working and pay social insurance for three more years to complete the social insurance premium payment duration of 20 years, then he shall be entitled to the retirement regime.

b/ A laborer, who has worked as a pit coal miner for less than 15 years but has paid social insurance premium for full 20 years and still has a good health, may continue working as a pit coal miner until the full 15 years of working to enjoy the retirement regime.

Example 6: By January 1, 2002, Mr. Ha Van B will reach full 50 years of age and has paid social insurance premium for 21 years, of which 14 years for working as a pit coal miner. If he still has a good health, he may continue working as a pit coal miner and pay social insurance premium for one more year to complete the working period of full 15 years before being entitled to the retirement regime.

c/ A laborer, who has neither paid social insurance premium for full 20 years nor worked as a pit coal miner for full 15 years yet, but still has a good health, may continue working until the above-said two conditions are fully met before enjoying the retirement regime.

Example 7: By January 1, 2002, Mr. Nguyen Van C has reached full 50 years of age and paid social insurance premium for 16 years, of which 13 years for working as a pit coal miner. If he still has a good health, he may continue working and pay social insurance premium for 4 more years to meet the condition of 20 years of social insurance premium payment, of which at least 2 more years for working as a pit coal miner to meet the condition of 15 years of working as a pit coal miner. Then he shall be entitled to the retirement regime.

Pension levels and other social insurance regimes for the cases specified at Point 3 shall be calculated like those at Point 2, Section II above.

III. ORGANIZATION OF IMPLEMENTATION

1. Vietnam Coal Corporation shall have to organize the wide dissemination of the Government�s Decree No.61/2001/ND-CP of September 7, 2001 and this Circular among laborers, and at the same time direct its member units in compiling dossiers of persons who fully meet the retirement conditions, and work with the local social insurance offices in settling retirement regime for such laborers.

2. Vietnam Social Insurance shall have to guide the provincial/municipal Social Insurance offices in realizing, receiving dossiers and promptly settling the social insurance regime for laborers in strict compliance with regulations. Written guidance shall be sent to the Ministry of Labor, War Invalids and Social Affairs for monitoring and inspection.

3. The provincial/municipal Services of Labor, War Invalids and Social Affairs shall coordinate with the local Labor Confederation chapters and Social Insurance offices in guiding, examining and inspecting the implementation of the retirement regime to laborers in their localities strictly according to the provisions of this Circular.

4. This Circular takes effect as from January 1, 2002.

The re-calculation of the retirement entitlements for subjects who have been enjoying such regime since before the effective date of this Circular shall not be considered and settled.

Any problems arising in the course of implementation should be reported to the Ministry of Labor, War Invalids and Social Affairs for study and solution.

Minister of Labor, War Invalids and Social Affairs
NGUYEN THI HANG